Inflation variability between central bank's preferences and the structure of the economy: A note

The current paper seeks to build a theoretical explanation to understand why many central banks failed to reduce inflation variability despite having the desire. The result proves that central bank's preferences are a necessary condition but not sufficient to guarantee lower inflation variability. The structure of the economy and the types of the shocks are significant factors.

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Year of publication:	2011
Authors:	Sweidan, Osama D.
Published in:	Economic Modelling. - Elsevier, ISSN 0264-9993. - Vol. 28.2011, 1, p. 630-636
Publisher:	Elsevier
Subject:	Inflation variability \| Quadratic loss function \| Asymmetric loss function \| Central banks

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Type of publication:	Article
Classification:	E31 - Price Level; Inflation; Deflation ; E32 - Business Fluctuations; Cycles ; E52 - Monetary Policy (Targets, Instruments, and Effects) ; E58 - Central Banks and Their Policies
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010573288